AT&T beats estimates with impressive subscriber growth in Q1

In the United States, AT&T reported strong performance in the first quarter of the year, surpassing Wall Street expectations for wireless subscriber growth. The company gained a total of 324,000 net monthly bill-paying wireless phone subscribers, significantly exceeding the FactSet estimate of 258,300 additions. This growth was attributed to a successful strategy that bundled high-speed fiber services with 5G mobile offerings, catering to steady demand among consumers. AT&T's promotions, including generous trade-in offers for iPhones, played a crucial role in attracting new customers while also responding to an earlier uptick in subscriber churn observed in January. AT&T's Chief Financial Officer, Pascal Desroches, commented on the trend of device upgrades, indicating that they had exceeded the company's expectations since the announcement of reciprocal tariffs in early April. He noted that these promotions could lead to an accelerated demand for their services, especially as the company typically experiences higher upgrade rates in the second half of the year aligned with new iPhone model launches. This strategy reflects AT&T's aim to navigate an increasingly competitive market where telecom companies face pressure from rival providers and need to innovate continuously to retain and attract customers. Furthermore, AT&T achieved a 2% increase in total revenue for the quarter, reaching $30.6 billion, which surpassed analysts' expectations of $30.35 billion. The company also noted that over 40% of its fiber customers had opted for wireless plans, demonstrating their successful upselling efforts. Market analysts believe that with the ongoing focus on higher-value wireless plans and consistent service reliability, AT&T is positioned to continue its growth trajectory. The recent launch of the AT&T Guarantee policy, offering bill credits for service disruptions, further underscores their commitment to customer satisfaction. In light of these developments, AT&T has reaffirmed its forecasts for free cash flow and adjusted profits for the year, while also planning to start share buybacks in the upcoming second quarter. Competitors like Verizon have reported higher subscriber losses, primarily due to recent price hikes and contrasted promotional strategies. The industry landscape is shifting, and AT&T's ability to innovate and adapt is critical as it prepares for future challenges, particularly with the competition from T-Mobile and other mobile service providers in an evolving telecommunications market.